The General Counsel’s Role in Supporting Culture: Five Considerations for Directors

In brief: Written by Holly J. Gregory of Sidley Austin LLP, and originally appearing in the Report of the NACD Blue Ribbon Commission on Culture as a Corporate Asset, this tool provides five indicators for boards to use to determine whether their general counsel is well-positioned to positively influence corporate culture.

This resource can help your board

• Determine the reporting structure for the general counsel.

• Incorporate the general counsel into board-level decision making outside the traditional legal realm.

• Ensure business units include the legal department in decision making.

Most relevant audiences: audit committee members, lead directors, general counsel, and chief compliance officers 

Holly J. Gregory, Sidley Austin LLP. This document originally appeared as Section 7 in the Report of the NACD Blue Ribbon Commission on Culture as a Corporate Asset.

This tool is designed to provide directors with information about key issues in assessing the  extent to which the GC’s reporting structure, role within the management team, and relationships  with senior corporate leaders as well as with the board itself position him or her to support a healthy corporate culture. This information is provided for educational purposes only. It should not be construed or relied upon as legal advice.

The former chief justice of the Delaware courts has called the general counsel “the guardian of corporate integrity.” (See E. Norman Veasey and Christine T. Di Guglielmo, Indispensable Counsel: The Chief Legal Officer in the New Reality.)

As part of the board’s corporate-culture oversight activities, directors should consider the role of the general counsel (GC) and how the board’s relationship with the general counsel serves to support an appropriate culture.

The general counsel is the corporation’s chief legal officer, and the board of directors is the  highest authority for the general counsel’s client, the corporation. The GC advises the corporation, through the board and senior management, on matters of corporate governance, compliance, risk management, internal controls and ethics. All of these areas are closely related to corporate culture. Therefore the quality of the interaction between the board and the general counsel will have a considerable impact on the board’s oversight of, and influence on, culture. A recent report by the Association of Corporate Counsel advocates that the board should view the general counsel as a “key ally and partner in establishing a corporate culture that supports corporate performance without compromising ethical behavior, and legal and regulatory compliance.” (See M. Blatch, V. T. Richardson, and the Association of Corporate Counsel (ACC), Leveraging Legal Leadership: The General Counsel as a Corporate Culture Influencer.)